Prior to trial against Barreto and Unisource, the court granted Zhou's motion in limine to exclude all evidence relating to any settlement negotiations concerning the March 1, 2004 accident, and the court granted it pursuant to, inter alia, California Evidence Code Section 1154, which states that "[e]vidence that a person has accepted or offered or promised to accept a sum of money or any other thing, act, or service insatisfaction of a claim, as well as any conduct or statements made in negotiation thereof, is inadmissible to prove the invalidity of the claim or any part of it." This Section is thus similar to Federal Rule of Evidence 408, which generally precludes the admission of evidence of compromises, offers to compromise, and related statements in federal cases to prove the validity, invalidity, or amount of a claim.

After trial, the jury returned a verdict in Zhou's favor for $1,423,295: $173,295.24 in economic damages and $1,250,000 in general damages. Barreto and Unisource thereafter appealed, contending, inter alia, that Zhou's letters to State Farm should have been admissible to show that Zhou's injuries were at least partially caused by the second accident. The appellate court agreed.

The court in Zhou seemed to miss the point of this case. The reason that the court in Fieldson Associates allowed for the admission of the letters was not only because they related to a separate contract, but mainly because those letters never mentioned the contract at issue and thus the claim being settled. Conversely, in the Zhou case, Zhou's letters to State Farm explicitly mentioned not only the March 1, 2004 accident, but also the June 2003 accident with Barreto. Thus, the letters not only related to an accident other than the accident at issue, but they also clearly related to the accident at issue and should have been held inadmissible. In other words, they proved the partial invalidity of Zhou's claim against Barreto and Unisource by proving the validity of her claim against Thorntill.

In the Zhou case, the court's incorrect ruling ended up being inconsequential because the court found that the letters' exclusion constituted harmless error to the extent that, inter alia, Zhou himself testified about the second accident during both direct and cross-examination. But it stands as a potentially dangerous precedent in future cases.